House committee substitute makes the following change to the 1st edition:
Amends the long title.
Deletes proposed GS 1-505.1 (Power of sale with liens attached to proceeds).
Bill Summaries: H755 (2017-2018 Session)
Bill H 755 (2017-2018)Summary date: Apr 25 2017 - View summary
Bill H 755 (2017-2018)Summary date: Apr 11 2017 - View summary
Renames Article 7 of GS Chapter 23 as Municipalities and Other Governmental Units Authorized for Bankruptcy Relief.
Deletes the existing provisions of GS 23-48 and now provides the following. Details governmental entities that are authorized to seek any relief afforded under Chapter 9 of Title 11 (Bankruptcy) of the US Code as: (1) a taxing district, local improvement district, county, or municipality, with the approval of the Local Government Commission; (2) a correction enterprise as described in Article 14 of GS Chapter 148, with the approval of the Secretary of Public Safety; (3) a local school administrative unit, with the approval of the State Board of Education; and (4) a community college, with the approval of the State Board of Community Colleges; however, prohibits a community college from seeking relief under Chapter 9 of Title 11 (Bankruptcy) of the US Code if the filing of a bankruptcy petition would result in the community college's loss of eligibility for federally funded financial aid. Allows a governmental unit that is denied approval under the statute to appeal the decision to the superior court. Directs the superior court to review whether the decision is arbitrary or capricious.
Enacts new GS 23-49, authorizing a governmental unit permitted to seek bankruptcy under GS 23-48 to use or borrow additional working capital pursuant to a plan of adjustment confirmed by a US Bankruptcy Court or pursuant to an order issued by a US Bankruptcy Court. Clarifies that the statute does not prescribe a method of composition of indebtedness, as described in 11 USC 903.
The above provisions are effective October 1, 2017.
Renames GS 1-245 as Notice of judgments discharged through bankruptcy proceedings. Makes organizational changes. Modifies and adds to existing language to now provide as follows. Establishes that when a debtor in bankruptcy or other party‑in‑interest furnishes the clerk of the superior court of any county in this state a written form, order, or certificate from a United States Bankruptcy Court to the effect that (1) a debtor has been discharged, (2) the plaintiff or judgment creditor in whose favor judgments against the defendant debtor are docketed in the office of the clerk of the superior court have received due notice as provided by law, and (3) the judgments have been discharged or avoided in whole or in part, the clerk of the superior court must file the form, order, or certificate and enter a notation thereof on the margin of the judgments. Adds that the effect of any form, order, or certificate filed by the clerk pursuant to the statute is governed by Title 11 of the US Code and other applicable federal law. Provides that the statute applies to judgments already docketed as well as to future judgments.
Amends GS 44A-12(a), concerning the filing of a statutory lien on real property, to require a copy of the claim of lien on real property to be filed with any receiver, bankruptcy trustee, debtor in possession, or assignee (previously, with any receiver, referee in bankruptcy, or assignee) for benefit of creditors who obtains legal authority over the real property. Makes other technical and clarifying changes.
Amends GS 44A-13(a), concerning where and when an action to enforce a statutory claim of lien on real property can be commenced. Makes organizational changes to the provision providing the specified filings that can satisfy the requirements for the commencement of the action if filed within the time required. Adds the filing of a proof of claim pursuant to 11 USC 501 to the specified filings that satisfy the requirement.
Modifies GS 47-29 (Recording of bankruptcy records) to now provide that a copy of the petition with the schedules omitted beginning a proceeding under Title 11 of the US Code or of any form, order, or certificate of a US Bankruptcy Court in the proceeding must be recorded in the office of any register of deeds in North Carolina, and it is the duty of the register of deeds, on request, to record the form, order, or certificate. Provides that the register of deeds to is entitled to the same fees for this registration as the register of deeds is now entitled to for recording conveyances.
Amends GS 59-32(1), defining bankrupt to mean: (1) a debtor having filed a petition under any applicable chapter of Title 11 of the US Code; (2) a debtor against which an order for relief has been entered pursuant to 11 USC 303; or (3) insolvent under any State insolvent act (previously, defined to mean bankrupt under the Federal Bankruptcy Act or insolvent under any State insolvent act).
Amends GS 84-5(a)(2)l, requiring the performance of legal services in insolvency proceedings or before a US Bankruptcy Court (was, before a referee in bankruptcy or in court) to be performed for a corporation by a duly licensed attorney.
Amends GS 96-10(c) to eliminate the provision pertaining to the priority of employer contributions to the Employment Security Administration Fund then or thereafter due in the event of an employer's adjudication in bankruptcy, judicially confirmed extension proposal, or composition under the Federal Bankruptcy Act of 1898. Makes other technical and clarifying changes.
Enacts GS 1-505.1, authorizing a receiver, in the sale of property ordered under GS 1-505, to sell assets of the receivership free and clear of interests in the assets in the manner provided by 11 USC 363. Effective October 1, 2017, and applies to sales of property ordered on or after that date.